In New York, the Dow Jones Industrial Average fell 9.7 percent, the NASDAQ dropped nearly 1.3 percent and the S&P 500 declined 0.8 percent. For the S&P, a 6.3 percent decline in August made it the worst month since May of 2012, as investors worried about China's economic growth and were uncertain about the U.S. central bank's decision on raising interest rates in September.

Germany's DAX was down 0.4 percent, while France's CAC dropped half a percent.

Japan's NIKKEI was off about 1.3 percent, while the Shanghai Composite fell 0.8 percent.